Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-00099/USCOURTS-azd-2_04-cv-00099-0/pdf.json

Nature of Suit Code: 950
Nature of Suit: Constitutionality of State Statutes
Cause of Action: 28:2201 Declaratory Judgment

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1 The Court will deny the request for oral argument because the parties have

submitted memoranda thoroughly discussing the law and evidence and the Court

concludes that oral argument will not aid its decisional process. See Mahon v. Credit Bur.

of Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999); Partridge v. Reich, 141 F.3d 920,

926 (9t h Cir. 1998); Lake at Las Vegas Investors Group, Inc. v. Pacific. Dev. Malibu Corp.,

933 F.2d 724, 729 (9th Cir. 1991), cert denied, 503 U.S. 920 (1992).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Uni-Bell PVC Pipe Association, 

Plaintiff, 

vs.

City of Phoenix, 

Defendant. 

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No. CV-04-0099-PHX-DGC

ORDER

 Pending before the Court are the p arties’ cross motions for summary judgment. See

Docs. ##26, 30. For the reasons stated below, Plaintiff’s motion for summary judgment will

be denied and Defendant’s motion for summary judgment will be granted.1

Background

The City of Phoenix bans the use of polyvinal chloride (“ PVC”) sewer pipes in all

its public sewer projects. Doc. #1. On January 14, 2004, Plaintiff Uni-Bell PVC Pipe

Association (“Uni-Bell”), a trade association that advocates and lobbies on behalf of PVC

pipe manufacturers, filed a complaint against the City seeking declaratory and injunctive

relief pursuant to 28 U.S.C. § 2201. Id. Plaint iff asks the Court to invalidate the City’s ban

Case 2:04-cv-00099-DGC Document 34 Filed 11/29/05 Page 1 of 7
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on PVC sewer p ip e as “ erroneous, arbitrary, and wholly unwarranted,” and seeks both an

injunction precluding the City from enforcing it s ban and an order permitting the

installation of PVC pipe in the City’s municipal sewer system. Doc. #1. 

Plaint iff acknowledges that the City has the authority to regulate the construction,

maintenance, and operation of the sewer system within City limits pursuant to A.R.S. § 9-

276, but argues that the stat ut e does not grant the City “unfettered discretion.” Doc. #26.

Plaintiff argues that the City can sustain the PVC ban only if it is supported by a rational

basis. Id. 

Both parties’ experts agree that PVC is an accep t able sewer pipe currently used in

73% of the national sewer pipe market . Id. Both also agree that PVC and the City’s current

pipe – vitrified clay – are essentially equivalent product s. Id. Plaintiff argues that the

City’s unilateral ban is arbit rary and unreasonable and should be struck down by the

Court. Id. The Cit y argues t hat the Court must uphold the ban unless Plaintiff shows that

it resulted from fraud or bad faith.

Discussion

I. Summary Judgment Standard.

Summary judgment is appropriate if the admissible evidence, viewed in the light

most favorable to the nonmoving party, “show[s] that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a mat ter of law.” Fed. R.

Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Jesinger v. Nev. Fed.

Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). “ [O]nly disputes over facts that might

affect the outcome of the suit . . . will properly preclude the entry of summary judgment.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Jesinger, 24 F.3d at 1130. To

preclude summary judgment the dispute must be genuine, that is, it must be “such that a

reasonable jury could ret urn a verdict for the nonmoving party.” Anderson, 477 U.S. at 248.

II. Applicable Legal Standard in this Case.

The parties disagree on the legal standard to be applied in t his Court’s evaluation

of the City’s pipe decision. Plaintiff argues that the Court must strike down the City’s

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p olicy if it is not supported by a rational basis. The City argues that the Court must apply

a far more deferential st andard, interfering with the City’s policy only if Plaintiff shows it

to be tainted with fraud and bad faith. Both sides agree t hat Ariz ona law controls the

Court’s decision, and both sides cite cases to support their argument.

Although the Arizona cases cited by t he p art ies have not adopted a single, clear,

repeated standard, the Court concludes t hat a deferential standard should be applied. The

Ariz ona Supreme Court has stated that “there is an area of discretion lodged in cit y

officials in carrying out transactions for the benefit of the city and it s inhabitants. In the

absence of fraud or bad fait h, t he validity of their actions will not be entertained by

courts.” Sulfur Springs Valley Elec. Coop., Inc. v. City of Tombstone, 407 P.2d 76, 78 (Ariz.

1965). Arizona cases have described this deferential approach with various words. The

Arizona Sup reme Court has explained that “courts, in the absence of fraud or a palpable

abuse of discretion, have no power to control [a city’s] action.” Phoenix v. Landrum &

Mills Realty Co., 227 P.2d 1011, 1014 (Ariz. 1951) (citation omitted). The Supreme Court

has also stated that a court will not overturn the judgment of a city council unless t he

council’s discretion was “unquestionably abused.” City of Glendale v. White, 194 P.2d

435, 439 (1948). In the somewhat analogous context of reviewing the decision of a state

agency, the court explained that “courts will acquiesce in the legislative determination in

all matters of fact unless it is clearly erroneous, arbitrary and wholly unwarranted.”

Edwards v. State Bd. of Barber Examiners, 231 P.2d 450, 452 (1951). 

The Court concludes from these cases that the City’s sewer pipe decision should

be overt urned only if it resulted from fraud, bad faith, or an unquestionable abuse of

discretion. The standards of fraud and bad faith are clear, and the Court does not view an

unquest ionable abuse of discretion as far different. As the Arizona Supreme Court

explained, “one attacking the validity of a contract made by a municipality has the burden

of showing that such a contract was so improvident that it amounts to a palpable abuse

of discretion. It is not enough to show that the contract was disadvantageous to the cit y

or that it might possibly prove to be such.” Landrum & Mills, 227 P.2d at 1014. 

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In arguing for a less deferential standard, Plaintiff relies primarily on Home Builders

Assoc. of Central Arizona v . Scottsdale, 875 P.2d 1310 (Ariz. Ct. App. 1993). But the court

of appeals in Home Builders clearly recognized that municipal act ions are entitled to

deference under Arizona law. Id. at 1313. It is true that the court inquired into the rational

basis for t he cit y ’s action in that case, but the rational basis inquiry was required by the

governing statute. See A.R.S. § 9-463.05. Plaintiff has cited no statute that requires a

rational basis in this case.

Home Builders also concerned a city’s affirmative assessment of development fees.

The assessment of such fees is expressly regulated by Arizona statutes. Id. The Court

sees a significant difference between a general policy regarding sewer systems and an

affirmative act that requires citizens to pay money. Court s considering such an affirmative

ext raction of money should carefully review the statutory authority upon which it is based

and confirm that the fees comp ly with authorizing statutes. Courts reviewing general city

policy decisions, however, should recognize that cities are bot h authorized to make such

general determinations and more qualified to do so than courts.

III. Analysis.

Applying the more deferential standard, the Court concludes that summary

judgment must be entered in the City’s favor. Plaintiff has not presented facts from which

a reasonable trier of fact could conclude that the City acted fraudulently, in bad faith, or

in an unquestionable abuse of discretion. To be sure, reasonable minds could disagree on

whether the City’s PVC pip e ban is technically or economically correct, but the correctness

and wisdom of a city’s decision is not for this Court t o review. Courts may intervene only

when matters have gone seriously awry – only when the City has acted fraudulently, in

bad faith, or has unquestionably abused it s discretion. The City’s reasons for the PVC

pipe ban, even viewed in the light of Plaintiff’s evidence and argument s, could not be

found by a reasonable jury to satisfy this standard.

The Cit y assert s three reasons for its decision. First, the City has used vitrified clay

pipe for several decades, wit h ap p roximately 4,300 miles of clay sewer lines installed to

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2

 Although Plaintiff argues t hat the City’s decision was arbitrary, the Court

concludes that Plaintiff’s evidence does not rise t o the level of an unquestionable or

palpable abuse of discretion. As t he Arizona Supreme Court explained, “[i]t is not enough

to show that the contract was disadvantageous to the city or t hat it might possibly prove

t o be such.” Landrum & Mills, 227 P.2d at 1014. One attacking the validity of a cit y ’s

action has the burden of showing that it was “so improvident that it amounts to a palpable

abuse of discretion.” Id. The Court views this level of improvidence as akin to fraud and

bad faith, not simply as lacking in a rational basis.

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date. Doc. #24. The Cit y believes that a change from clay to PVC would result in

additional burden, time, and cost and require substantial changes in the way the City

designs, inspects, operates, and maintains its sewer sy st em. Id. Plaintiff challenges the

City’s lack of experience with PVC as untrue, noting that twenty-five years ago PVC p ipe

was inst alled in some City subdivisions without incident. Doc. #28. Plaintiff also argues

that “[the City] cannot act as though [it is] on some island without access to knowledge

or resources,” noting the presence of several independent cont ract ors in the Phoenix area

skilled in PVC p ip e installation. Doc. #26. These arguments suggest that the City’s

decision might be unwise or even incorrect, but they do not demonstrate that the City’s

rationale is fraudulent, the result of bad faith, or unquestionably an abuse of discretion.2

Second, the Cit y ’s policy rests on the recommendation of three separate committees

organiz ed t o study whether the ban on PVC pipes should continue. Doc. #24. In 1994, the

City hired an international engineering firm, Black & Veach, to study the issue and make

recommendations. The firm received public input regarding the advant ages of PVC pipe,

including oral and written presentations from Plaintiff. Id. The Black & Veach study

concluded that a switch from vitrified clay t o PVC would not produce a “commensurate

benefit” to the City and recommended the Cit y continue its ban. Id. The City appointed

a second product evaluation committee to revisit the issue in 1999. Id. This committee

recommended that the City allow PVC pipe, but only if strict precautionary policies were

adopted, including hiring a full time on-site inspector, instituting pipe deflect ion testing,

limiting pip e bedding and backfill material to Class I, and limiting PVC pipe installation to

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new subdivisions. Id. In 2003, a third independent engineering group was consulted and

concurred with the 1999 committee’s recommendation and restrictions. Id. Based on the

three committees’ comments, the City decided to uphold its ban.

Plaintiff disagrees with the committee recommendations, calling them unnecessary,

arbit rary, clearly erroneous and “nothing short of pretexts used by [the City] to reach [its]

predetermined result.” Doc # 26. But Plaintiff offers no facts that show the committee

recommendations were fraudulent, in bad faith, or unquestionably an abuse of discretion.

The City evaluat ed t he necessity of the ban on three separate occasions by convening

three independent commit tees. Doc. #24. And these actions were not conducted in secret.

Id. Black & Veach sought community input by holding public hearings and received oral

and written statements from Plaintiff. Id. Despite Plaintiff’s input, Black & Veach

concluded that continuation of the ban was in the best interest of the City. Doc. #24.

Third, the City banned PVC pipes because of its belief that PVC is not an

environmentally-friendly product. Plaintiff argues there is “no conclusive negative health

or environmental effects directly associated with the manufacture or use of PVC.” Doc.

#28. Again, Plaintiff raises a question as to whether the City’s decision is correct , but no

question as to whether it is fraudulent, in bad faith, or an unquest ionable abuse of

discretion.

 Considering the facts in the light most favorable to Plaintiff, the Court finds that

Plaintiff has failed to meet its burden. Absent a showing of fraud or bad faith or an

unquestionable abuse of discretion, the Cit y ’s policy decision will not be second-guessed

by the Court. See Sulphur Springs, 407 P.2d at 78. 

IT IS SO ORDERED Defendant’s Motion for Summary Judgment is granted.

IT IS FURTHER ORDERED Plaintiff’s Motion for Summary Judgment is denied.

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IT IS FURTHER ORDERED the Clerk of the Court shall terminate this action.

DATED this 28th day of November, 2005.

Case 2:04-cv-00099-DGC Document 34 Filed 11/29/05 Page 7 of 7