morning your honour's increase court i'm william stoudamire i represent the central arizona water conservation district often referred to by its acronym ca w c the hope to reserve several minutes my time for a bottle and i realize that's my responsibility obviously operates maintains and pays for the central arizona project the three hundred plus mile canal system a canal sort of understates and it's an enormous awkward up that moves a million and a half acre feet that's more than half of arizona's entire water supply colorado river water supply into central arizona and it serves that water supply to more than five million arizona and that's more than eighty percent of the state's population because it does that because the c a p is the only means the only physical means by which that water can be moved from the river which forms its western border into the population centers of the state ca to the cd performs a critical governmental function and therefore is an arm of the agency to state the arizona department of water resources or use that seat of the city is not what matters though is the way and this is one of the the standards this court has repeatedly applied is how does state law you the entity well the department of water resources as expressed its views as a state agency it is just one agency of the state in fact by my count it's one of at least four into these the state of arizona that have arizona yes your honor and it is obvious state as a whole their point and that's correct your honor it is serves the county but that also understates the reality those three counties are the population centers of arizona and they have been for decades it has always been the purpose of the state of arizona and this is well documented historically and through cases that this court has decided that arizona needed to find a way to move water from the colorado  without that district being formed without c s w c v the united states would never release the funds and build the central arizona project so there is if very clear line of necessity between arizona wants this water stone or case so is there anything in the record to suggest arizona would step in and pay a money judgment against say a w c date i don't think there's anything in the record that proves that point but i look at this and i even  state of alaska and yet this court use that functional liability just to say alaska is functional viable because of the critical importance that will leave the very same analysis applies here ca to the city is the only entity created by the state of indicate that the state would rely on its other water resources instead of stepping and pay a money judgment against you well you're out of that stance it doesn't doesn't say one way or another what the state would do  and if you view it from this perspective and we certainly do this is nearly half of the new school water supply available to more than eighty percent of the system in the state there is no way that the state could do without that quantity of water so if ability to perform under the two relevant contracts that is the master repayment country which by the way allows the united states to cease water deliveries to central arizona you'll see it is you cannot pay its do its bills when due for a period of twelve months or more the state of arizona would face the stark choice of let that canal go empty and eighty percent of our citizens suddenly use half of the water they used to use or do we step in to make sure city can satisfy those obligations to me there is only one credible choice the state would have to do something now what it would do and how it would do it we don't know but the state is not going to sit idly by and ignore the loss of half of their business force so under the five factors in the mitchell test is there one that is to be held more significant than the others because the one that strikes me as really remarkable is the the status under the constitution on that arizona's constitution calls public improvement districts political subdivisions of the state right yes and then of course you have to between political subdivisions school districts in that case form the state there's no similar statute in arizona here while it was created as a district it was bear this in mind was created soley to satisfy the requirements of the bas project that so it is what it is because of federal law but that doesn't in the analysis it's that one aspect of five factors the first two factors you to look at i guess i did give you a compound question yes or does one factor income from the rent it's not allowed to do that what it has to do with all of virtually all there are some very narrow exceptions but virtually all of its funds are deposited with the state treasurer the state treasure damages were aborted in this case yes this paying for those damages i believe the district will pay for those damages but isn't that the first factor like whether any liability is paper out of state and if it is often construed that way but i'll turn to it and i'm aware of your honor's question about whether it was effectively raised but the stoner case and it's it's it's the functional liability versus legal entire state let me compare the alaska railroad which serves four cities three of which have deep water ports all four of which have airports with commercial air traffic and all are connected to each other  don't know bad but i'll accept that for purposes of argument that it is the only railroad this is the only canal that takes colorado river water from the river to the people of arizona the eighty percent of the people of arizona good morning ma'am please the court my name is tamara cut i mean attorney for the plaintiff in the absolutely amy crescent clearly the central question for the court to decide is whether or not the state has created and treats specifically stated that the eleventh amendment does not apply does not extend to counties and similar municipal corporations but it went on to clarify that the real question is answered by looking at state law and how that state created the entity in question by applying arizona law to the five mental factors again there is one conclusion that it is not an arm of the state let's start with faction number five that was raised during the course of the  argument which is the most important factor no question number one no question you start with number one because it folds into a number it folds into number one so if you'll indulge me just for a quick moment i'll make that link as it relates to it being a municipal corporation entity was created by arizona statute forty eight thirty seven zero two and in there it specifically states that the districts in this case and other water districts like at our political subdivisions and municipal political improvement district is entitled to the rights privileges benefits and title to communities and exemptions granted municipalities and political subdivisions by the state constitution the law of the state of arizona and the united states constitution i submit to your honor's that nowhere in the state constitution does it specifically identify the district as either a state agency or a state instrumentality nowhere does it granted the same immunities that the state itself is entitled to right well i think one of your arguments you cite arizona revised statute section forty eight thirty seven sixteen to argue that arizona would not be liable for i don't do we call the ca a w c essential government function that arizona would step in before dissolution so doesn't your arguments get to step in the analysis i would submit mom and the reason is this here on a very clearly the district is relying on two key cases and they've already been raised one is alaska cargo transport and the other is on one versus the commonwealth for the port authority out of mariana islands if we take a look at the elements that are set forth in the alaska cargo case and we juxtapose the facts the court relied on there with the facts presented here i would submit to you that even though in alaska the court found that it wasn't are here the result necessarily has to be different let me touch on those  this district is not unique in this case in fact the state legislature for arizona has an act of no fewer than one two three four statutes that create additional water related districts forty eight eleven  ten eleven forty eight twenty three zero one forty eight twenty nine zero one forty eight thirty four zero one they create domestic water improvement districts agricultural improvement district geisha and water conservation district irrigation water delivery districts so while council suggests that it is unique it is not however is water conservation in the state of arizona important just as it is in the during case where you are dealing with  air pollution absolutely but the services provided by the district of hand do not service all of the members of the state of arizona they only deal with the three counties in the state of arizona and i submit to this him he said eighty percent of the people of the state out of those three counties that right that well your honor unfortunately that is she was never part of the discovery in this case so i have no means by which to challenge that before the court today for purposes of this argument i will accept that to be true and i would submit to the court that is still not sufficient for the argument at hand so then we look at it so that was anything else to which is really important in alaska the court created what it referred to as a financial safety net what it meant by that is if the railroad ever found itself in a position of no longer being self sustaining rather than it disappearing and going off into the sunset if you well they have to go to the state legislature and get money to survive or the land that was deeded to it by the federal government would revert back to the federal government so the state had an incentive to do that in arizona not one statute says or can be inferred to say that it is intending to create a financial safety net such that if the district finds itself unable to be self sustaining that the state will step in that i submit to you it is an assumption on the part of the district again without any evidence to corroborate it but what we do know is in the statute that that control the operations of the district what happens is that if they do this if the district finds itself unable to pay its and that it ness by arizona law it is not allowed to go back to the state poverty it must levy taxes against the three counties that it services and continue that levy until those debts are paid if it goes so far as the district finds itself unable to continue operations at all contrary to what the district believes the state will step in and rescue it the state law says otherwise when it dissolves all of its assets will be divided up and not sent back to the state coffers which you would assume if in fact it was an arm of the state but would go to the three counties that it services the third element of alaska that renders it in a political in this case is also equally as important the alaskan legislature  it necessarily an arm of the state there is no such language in arizona how do you distinguish his argument regarding mt health these application you know he was he said that mt we can distinguish look you need to look to the state law this is not a but not healthy supply nickel subdivisions clearly are are not and i mean the arizona statute says it's a political subdivision right and not healthy is not arizona law so it's not dictating how the arizona law should apply or not apply to it subdivisions or it's municipal corporations it's simply saying that as a general principle the eleventh amendment does not apply to those entities right but in order to know for sure you look to the state law does that answer a question does thank you ok so the fourth element that's also very important in alaska is the amount of control that the state exercises against the state and it made a point of saying that all of the board members of the board being those that direct the operations of the railroad in alaska were appointed by the governor of the state of alaska here the fifteen board members are elected within the three cat three counties that the district services the governor has nothing to do with those one of the things that counsel made reference to in his briefs was the fact that the monies that are levied by the district are then deposited into the state same state treasury somehow assume some responsibility for that and i would submit to you that that is absolutely not that it's to the property right they have the ability to tax the property yes ma'am and that's the money that goes into the state that's the argument there right beside sleep and i would submit to you that that's not unlike any of us having a bank account when you look at state legislation the district is run by the fifteen member board the fifteen member board comes from the count that board among its list of responsibilities is to collect that money to deposit that money to withdraw that money at its discretion not the state treasurer to invest that money to apply it to the operations of the district again the treasurer is nothing more than a bank whereas the district through its board dictates what they do with those funds and those ford numbers they are elected within each county then are they county officials now well i'm not sure about whether or not they're county officials i believe it is an open election but i defer on that because i'm not as familiar with the primary of the statutes right i'm sorry it would probably be in light of th statute what your honor and i know that it details that quite a bit i just don't have a commit to memory apologise so based on but based on those five factors i submit to you that the alaska cargo class case can be easily distinguished from this case and does not give the solid foundation that the district hopes it would in order to justify it being mysteriously declared an arm of the state in the absence of either state statute constitutional mandate or even  people know and i appreciate you raising that question in two thousand and five smith vs cia w cd the district ended up in front of the ninth circuit and it was dismissed for grounds completely unrelated to the eleventh amendment there is not one reference in the dicta footnote in passing or directly that the district in that case ever made an attempt to assert its eleventh amendment rights to sovereign immunity commonwealth case again it looked as if the court was relying on the uniqueness because there which is truly unique we have one authority that ham over all of the ports and all of the airports for the mariana islands so it stands to reason on some level that in fact if that entity though it was intended to be self sustaining would find itself unable to that the that the commonwealth of the money on the islands would step in and save it or its economy would disintegrate that was one of the rationales of the court but importantly as well the court relied on the fact that there too the board of directors was appointed by the governor it was not they were not elected again here they are elected also in the commonwealth case the court made reference to section twenty one eighty five of that state's legislation where it's where it prefers to the commonwealth port authority as quote assuming all rights obligations and duties of the state it goes on to say that the commonwealth port authority quote acts for the state i would submit to you that that language if not directly very strongly in first the fact that the state legislation in the mariana islands intended for this entity to be an arm of the state and therefore should not apply in this case as well but the beans this case would have to her but the beaches case does apply and if you look at the facts in that case and i i won't take the court's time to go through them here again but the facts in the being just case are identical to this where the funds that were received by the district and being just were local they were here where the binges district is working locally even though it notion that the ability to levy taxes is critically important to showing that in fact an entity is not an arm of the state and before i close and answer any remaining questions let me end with this thought i have not had an opportunity to speak with on in its brief it's specifically stated that rather than defend it rather than pursue in interlocutory brief at that when it lost its motion for summary judgment  quote rather than c w c d chose to defend the case on the merits in an effort to defeat what it believed to be a merit lists f m l a claim i submit to your honor's they lost that bet they lost a trial they are not an time a couple of quick points first judge callahan you raise a question about section forty eight thirty seven sixteen and you are absolutely correct the state of arizona cannot contemplate this illusion of the district without the district there is no counter party to the federal repayment contract for the operations and maintenance contract and there is no water flowing through the central arizona project so it will never be dissolved it has to be a viable entity to go to and they serve without compensation other than perdiem and that sort of thing to go to the distinctions the council try to make with regard to the alaska railroad she noted that there are four different types of water districts in the state of arizona and that's true only one of them only one kind this kind of the central arizona water conservation conservation district and only one of them this is the only one performs this function it moves the water from the colorado river to the people who need it no other entity is authorized to do so no other entity exists in arizona the other districts are completely unlike in fact what they are like or like the air quality districts in the beaches case there are thirty six of those districts across the state of california they are staffed by in that case the employee there was a star was a employee of the county in question over placer county not an employee of the district it was an ex official as the case said employee of the  not finding a language that it was it was essential to the future health well being and safety of the state of arizona and its and its citizens to quickly construct the c a p n there after managing that to me tells you all you need to know about what state law thinks of this entity and why it is indeed an arm of the state all right you have it for now all right thank you very much thank you and that is an excellent argument