Court Opinion

ID: 6478583
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:48:29.508671+00
Date Added: 2024-06-11T15:54:04.386031
License: Public Domain

FIDEL, Judge,
dissenting:
I respectfully dissent. The taxing authorities of this state have had reason to assume since 1989 that the major fiscal issues of this case were fully and finally resolved by Arizona Tax Research Ass’n v. Maricopa County, 162 Ariz. 94, 781 P.2d 71 (App.1989), vacated in part on other grounds, 163 Ariz. 255, 787 P.2d 1051 (1989). This case should be governed by stare decisis. Our court should defer to settled law.
I take this position for three reasons. First, the identical arguments presented in this case were made in Arizona Tax Research by many of the identical lawyers who make them here. The Salt River Project and Arizona Public Service Company, parties here, were parties there as well. This lawsuit is a practical replay of the lawsuit finally concluded there. Appellees cite these facts as compelling grounds for issue preclusion. See El Paso Natural Gas Co. v. State, 123 Ariz. 219, 599 P.2d 175 (1979), cert. denied, 445 U.S. 938, 100 S.Ct. 1331, 63 L.Ed.2d 772 (1980). Unfortunately, as the majority points out, this argument for issue preclusion was not preserved. Appellees, caught in a quagmire of our current appellate procedural law, attempted by cross-issue what must be done by cross-appeal.3 Yet, though we reach the merits, the very considerations pertinent to issue preclusion strengthen the case for deference to stare decisis. This controversy has been once resolved.
*488My second reason for deference is that the first resolution of this controversy was reasonable and fair. Our tax code contemplates two categories of property pertinent to this case. One is inchoate — construction work in progress — brick and mortar rising into form. Ariz.Rev.Stat.Ann. (“A.R.S.”) § 42-144(C)(l) and (E) (current version at A.R.S. § 42-144.02(0) and (H)(1)). The second is choate, complete, accomplished — an operating plant in service. A.R.S. § 42-144(C)(5) (current version at A.R.S. § 42-144.02(H)(5)). Both are unquestionably property subject to taxation. The question here, as in Arizona Tax Research, is whether for constitutional purposes they are the same.
Article IX, section 19, of the Arizona Constitution refers to “property subject to taxation in the prior year.” Our two courts interpret this phrase differently because they place their focus differently. The majority focuses on the elements of a power plant — its brick and mortar and raw land — and concludes that the property composing the new plant was subject to taxation as work in progress in the prior year. In Arizona Tax Research, by contrast, the court emphasizes the qualitative difference between work in progress and a new plant in service, finding the latter to be property of a wholly different character than was subject to taxation in the prior construction year:
A utility plant under construction is useless until it is placed into service and able to produce both electricity and revenue. That the legislature recognized this is evident from the distinction created in A.R.S. § 42-144 between “CWIP” and “OPIS” and by the lesser valuation accorded “CWIP”. Once the plant is placed in service its character changes both practically and statutorily.
Arizona Tax Research, 162 Ariz. at 96, 781 P.2d at 73 (emphasis added).
The majority feels bound to reject Arizona Tax Research by “the plain language ... of the Arizona Constitution.” I do not find that language so plain in application to the question of this case. The Constitution speaks of “property subject to taxation” from one year to the next, but does not specify what occurs when property, between tax years, undergoes the kind of qualitative transformation that Arizona Tax Research describes. We should not pretend that those who voted article IX, section 19, into the Constitution “intended” a precise answer to that question. In this, like many questions of constitutional or statutory interpretation, the answer cannot be deduced; it must be chosen by practical application of a phrase to an uncontemplated event. What Llewellyn wrote of statutory interpretation applies to constitutional interpretation as well:
[When] language is called upon to deal with circumstances utterly uncontemplated at the time of its passage, ... the quest is not properly for the sense originally intended by the statute, for the sense sought originally to be put into it, but rather for the sense which can be quarried out of it in light of the new situation.
Karl N. Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes Are To Be Construed, 3 Vand.L.Rev. 395, 400 (1950). The court in Arizona Tax Research approached the issue in this spirit, and I find its resolution practical, sensible, and sound.
My final reason for deference is ah inference that I draw from our supreme court’s disposition of Arizona Tax Research. The supreme court accepted review of an issue of attorneys’ fees in that case, but declined to review its central holding. Arizona Tax Research Ass’n v. Department of Revenue, 163 Ariz. 255, 787 P.2d 1051 (1989). One ordinarily attributes no endorsement when that court declines review. See, e.g., Calvert v. Farmers Ins. Co. of Ariz., 144 Ariz. 291, 297 n. 5, 697 P.2d 684, 690 n. 5 (1985) (Denial of review does not imply acceptance of legal analysis or conclusion.). But see Hagen v. United States Fidelity & Guar. Ins. Co., 138 Ariz. 491, 491, 675 P.2d 1310, 1310 (1984) (Denial of review usually attests approval of result, but not necessar*489ily approval of analysis.). Yet the history of Arizona Tax Research marks it as no ordinary case. Though that appeal was first filed in the court of appeals, the supreme court accepted it for transfer, tacitly acknowledging its public importance. Arizona Tax Research Ass’n v. Maricopa County, No. CV-88-0468-T (Nov. 2, 1988) (minute letter granting Maricopa County’s petition to transfer case to Supreme Court). Then, however, faced with the parties’ motion for acceleration, the court returned the case to the court of appeals, citing “the need for immediate, thorough consideration of the issues.” Arizona Tax Research Ass’n v. Maricopa County, No. CV-88-0468-T (Dec. 20, 1988) (order transferring case from Supreme Court to Division Two). This background gives perspective to the court’s later action on review. Confronted with a decision of statewide fiscal importance, one that it had acknowledged to require “immediate” disposition, the supreme court would not have taken up the minor issue of attorneys’ fees and ignored the constitutional holding, had it found that holding to be wrong. To have done so would have been an act of irresponsibility that I will not attribute to that court.
In conclusion, I believe that the issues of this case were fully and fairly settled in Arizona Tax Research. The supreme court, with the opportunity to do otherwise, chose to let that holding stand. In intervening years, tax authorities have undoubtedly acted on the assumption that it is valid law. Our court now unsettles the settled. I would defer.

. In a pending petition before our supreme court, the State Bar of Arizona seeks to simplify existing law by adding the following to the Arizona Rules of Civil Appellate Procedure:
13(b)(3) The brief of the appellee may, without need for a cross-appeal include in the statement of issues presented for review and in the argument any issue properly presented in the superior court. The appellate court may affirm the judgment based on any such grounds.
The appellate court may direct that the judgment be modified to enlarge the rights of the appellee or to lessen the rights of the appellant only if the appellee has cross-appealed seeking such relief.
In support of its proposal, the Bar describes the categories and distinctions of our present law of cross-appeals as "a trap for the unwary" and as "obscure and difficult to apply even if one is aware of them.” Petition for Adoption of Rules 13(b)(2) and (3) of the Arizona Rules of Civil Appellate Procedure, Supreme Court No. R-91-0050 (filed Dec. 20, 1991). This case demonstrates the accuracy of the Bar’s description and the virtue of its proposal.