Court Opinion

ID: 867398
Source: CourtListenerOpinion
Date Created: 2013-05-11 22:44:52.319432+00
Date Added: 2024-06-11T15:37:23.097248
License: Public Domain

SUPREME COURT OF ARIZONA
                             En Banc

LEAGUE OF ARIZONA CITIES AND      )   Arizona Supreme Court
TOWNS; ARIZONA PLANNING           )   No. CV-06-0286-AP/EL
ASSOCIATION, a nonprofit          )
corporation; JOSEPH C. DONALDSON, )   Maricopa County
a qualified elector; THOMAS J.    )   Superior Court
HESSLER, a qualified elector;     )   No. CV2006-011432
JOHN KEEGAN, a qualified elector; )
and LAWRENCE K. NELSON, a         )
qualified elector,                )
                                  )   O P I N I O N
           Plaintiffs/Appellants, )
                                  )
                 v.               )
                                  )
JANICE K. BREWER, in her          )
official capacity as Secretary    )
of State for the State of         )
Arizona; and THE BOARDS OF        )
SUPERVISORS OF APACHE, COCHISE,   )
COCONINO, GILA, GRAHAM, GREENLEE, )
LA PAZ, MARICOPA, MOHAVE,         )
NAVAJO, PIMA, PINAL, SANTA CRUZ, )
YAVAPAI, and YUMA COUNTIES, in    )
their official capacities,        )
                                  )
            Defendants/Appellees, )
and                               )
                                  )
ARIZONA HOMEOWNERS PROTECTION     )
EFFORT, an unincorporated         )
association,                      )
                                  )
          Real Party in Interest. )
__________________________________)

        Appeal from the Superior Court in Maricopa County
              The Honorable Paul J. McMurdie, Judge

                AFFIRMED IN PART; VACATED IN PART
________________________________________________________________
GAMMAGE & BURNHAM PLLC                                                   Phoenix
     By   Lisa T. Hauser
          Grady Gammage, Jr.
          Michella Abner
Attorneys for League of Arizona Cities and Towns,
Arizona Planning Association, Joseph C. Donaldson,
Thomas J. Hessler, John Keegan, and Lawrence K. Nelson

TERRI SKLADANY, ACTING ARIZONA ATTORNEY GENERAL                          Phoenix
     By   Emma L. Mamaluy, Assistant Attorney General
          Diana L. Varela, Assistant Attorney General
Attorneys for Janice K. Brewer, Secretary of State
for the State of Arizona

MEAGHER & GEER PLLP                                                 Scottsdale
     By   Gary L. Lassen
          James M. Marovich
          Aaron S. Peterson
Attorneys for Arizona Homeowners Protection Effort

TERENCE C. HANCE, COCONINO COUNTY ATTORNEY                           Flagstaff
Attorney for Amicus Curiae County Supervisors
Association of Arizona

________________________________________________________________

B E R C H, Vice Chief Justice

¶1          Appellant League of Arizona Cities and Towns sued to

enjoin the Secretary of State from placing Proposition 207, the

Private    Property   Rights     Protection   Act,    on   the    2006    general

election   ballot.      The     superior   court    held   that   pre-election

review of Proposition 207 by the courts is improper.                 On August

31, 2006, this Court issued an order affirming the superior

court’s judgment and allowing Proposition 207 to remain on the

ballot.      This     opinion    explains     our    reasoning.          We   have

jurisdiction in this case pursuant to Article 6, Section 5(3) of

                                     - 2 -
the Arizona Constitution and Arizona Revised Statutes (“A.R.S.”)

section 19-122(C) (2002).

                    I.    FACTS AND PROCEDURAL BACKGROUND

¶2         The           Arizona         Homeowners          Protection          Effort

(“Homeowners”)      proposed       the    initiative    known      as    the    Private

Property   Rights        Protection      Act   to   limit    the   use    of   eminent

domain   and   to    expand       the    definition    of    regulatory        takings.

Homeowners     filed       with    the     Secretary        of   State    sufficient

initiative petition signatures to qualify Proposition 207 for

the ballot.

¶3         On July 31, 2006, the League challenged Proposition

207 in the superior court pursuant to A.R.S. § 19-122(C) and

(D).     The League asserted that Proposition 207 violates the

Arizona Constitution’s “Revenue Source Rule” by failing to state

the source of revenue to pay the “immediate and future costs of

the proposal,” rendering the initiative legally insufficient and

warranting pre-election review by the courts and removal of the

initiative from the ballot.                See Ariz. Const. art. 9, § 23

(“Revenue Source Rule” or “§ 23”).

¶4         The superior court dismissed the League’s challenge,

holding that Revenue Source Rule violations cannot be reviewed

before a proposition is enacted into law.                        The League timely

appealed pursuant to A.R.S. § 19-122(C).

                                         - 3 -
                                   II.   DISCUSSION

¶5           Proposition 207 seeks to prohibit the use of eminent

domain by the state and its political subdivisions to acquire

land   for    non-public      uses.        See    Ariz.    Sec’y   of   State,   2006

General Election Ballot Measures, Proposition 207, § 12-1131,

available      at     http://www.azsos.gov/election/2006/general/ballot

measures.htm (follow “Ballot Number 207” hyperlink).                        It also

proposes     to     expand   the   definition      of     regulatory    takings;   if

passed, it would require the state to pay just compensation to

landowners for decreases in private property values caused by

state land use laws.           See id. § 12-1134(A). 1             The proposition

defines the compensation that must be paid as “the sum of money

that is equal to the reduction in fair market value of the

property resulting from the enactment of the land use law.”                        Id.

§ 12-1136(2).

¶6           The League argues that Proposition 207’s failure to

specify      how    the   state     will    pay    any     required     compensation

1
       Proposition 207, § 12-1134(A), provides as follows:

       If the existing rights to use, divide, sell or possess
       private real property are reduced by the enactment or
       applicability of any land use law enacted after the
       date the property is transferred to the owner and such
       action reduces the fair market value of the property
       the owner is entitled to just compensation from this
       state or the political subdivision of this state that
       enacted the land use law.

                                         - 4 -
violates the Revenue Source Rule, Ariz. Const. art. 9, § 23, 2 and

that we therefore should remove the initiative from the ballot.

Section (A) of the Revenue Source Rule requires an initiative

that   proposes   a   mandatory   expenditure   of   state    revenues   to

identify an independent source of revenue that will cover the

immediate and future costs of the initiative.                Id.   If the

identified revenue source cannot sufficiently fund an initiative

in any fiscal year, the legislature may limit the funding of the

initiative to the identified revenue source.          Id. § 23(B).       The

Revenue Source Rule ensures that state general fund revenues are

2
       The Revenue Source Rule states:

       A.   An initiative or referendum measure that proposes
            a mandatory expenditure of state revenues for any
            purpose, establishes a fund for any specific
            purpose or allocates funding for any specific
            purpose must also provide for an increased source
            of revenues sufficient to cover the entire
            immediate and future costs of the proposal. The
            increased revenues may not be derived from the
            state general fund or reduce or cause a reduction
            in general fund revenues.

       B.   If   the   identified  revenue   source    provided
            pursuant to subsection [A] in any fiscal year
            fails to fund the entire mandated expenditure for
            that fiscal year, the legislature may reduce the
            expenditure of state revenues for that purpose in
            that fiscal year to the amount of funding
            supplied by the identified revenue source.

Ariz. Const. art. 9, § 23. The Revenue Source Rule applies only
to expenditures from the general fund required by state land use
laws. It does not apply to expenditures required by local land
use laws.

                                  - 5 -
not    used     to    fund     ballot    initiatives      that     require      state

expenditures.

¶7            The question before us is whether a violation of the

Revenue Source Rule renders an initiative legally insufficient,

thereby       allowing   pre-election        review     and   removal      of     the

proposition from the ballot, or whether such a challenge must

await passage of the proposition.                This issue poses a question

of law that we review de novo.              See Clean Elections Inst., Inc.

v. Brewer, 209 Ariz. 241, 243, ¶ 2, 99 P.3d 570, 572 (2004).

A.     Pre-election Review

       1.     Separation of Powers

¶8            The courts are reluctant to intrude on the prerogative

of the people or the legislature to proffer legislation.                         The

Separation       of   Powers     Clause     of    the    Arizona     Constitution

expressly prohibits one branch of government from intruding into

or    “exercis[ing]      the    powers    properly      belonging    to”     another

branch.       Ariz. Const. art. 3.         We have consistently interpreted

this clause to require the judiciary to refrain from interfering

with the legislative process.             See Winkle v. City of Tucson, 190

Ariz. 413, 415, 949 P.2d 502, 504 (1997); Adams v. Bolin, 74

Ariz. 269, 285, 247 P.2d 617, 628 (1952); State v. Osborn, 16

Ariz. 247, 249-52, 143 P. 117, 118-19 (1914).

¶9            A fundamental component of the legislative process in

Arizona is the right of the people to offer legislation through

                                         - 6 -
the initiative.            See Ariz. Const. art. 4, pt. 1, § 1; Allen v.

State,    14    Ariz.       458,    467,    130    P.    1114,       1118    (1913).       This

“legislative power of the people is as great as that of the

legislature.”         Tilson v. Mofford, 153 Ariz. 468, 470, 737 P.2d

1367, 1369 (1987) (citing Article 22, Section 14 of the Arizona

Constitution).              When    the     people       exercise       their      right     to

legislate       by     initiative,          they     therefore          enjoy      the     same

protection       from        judicial       interference         the        legislature      is

afforded.       Queen Creek Land & Cattle Corp. v. Yavapai County Bd.

of Supers., 108 Ariz. 449, 451, 501 P.2d 391, 393 (1972).

¶10            Before a bill passes, the courts generally may not

interfere with the legislative process.                        See Osborn, 16 Ariz. at

249,   143     P.    at     118.      The    legislature         may        thus   introduce,

consider, and pass any measure.                    And just as the courts may not

predetermine         the     substantive      validity          of     the    legislature’s

measures,      so     too    must    they    refrain          from    predetermining        the

substantive validity of the people’s initiatives, even if the

“legislation         might    conflict      with    the       Arizona       Constitution     or

state law.”         Winkle, 190 Ariz. at 415, 949 P.2d at 504.                           Noting

the      importance          of     preserving          the     parity        between       the

legislature’s and the people’s right to propose laws, this Court

has observed that

       determining an initiative’s validity before the voters
       had an opportunity to vote on it would “be tantamount
       to claiming the power of life and death over every

                                            - 7 -
       initiated measure by the people.   It would limit the
       right of the people to propose only valid laws,
       whereas the other lawmaking body, the Legislature,
       would go untrammeled as to the legal soundness of its
       measures.”

Id. (quoting Osborn, 16 Ariz. at 249-50, 143 P. at 118); see

also Osborn, 16 Ariz. at 250, 143 P. at 118; cf. Ariz. Const.

art. 4, pt. 1, § 1(6) (protecting laws initiated by the people

from legislative repeal or amendment).                Courts will thus review

the validity of an initiated measure only after the measure

becomes law.        Osborn, 16 Ariz. at 251, 143 P. at 118-19.

¶11           We may, however, review an initiative before passage

if authorized by law to do so.            See Adams, 74 Ariz. at 285, 247

P.2d at 628; Kerby v. Griffin, 48 Ariz. 434, 444, 62 P.2d 1131,

1135 (1936).         Authorization has been expressly given to the

judiciary to enjoin the placement of an initiative petition on

the ballot if it is “not legally sufficient.”                      A.R.S. § 19-

122(C).

¶12           We   first   interpreted    the    term    “legally   sufficient”

almost    a   century      ago,    describing    an   initiative    as   legally

sufficient if it complies with form and signature requirements

and is not fraudulent.            Osborn, 16 Ariz. at 250, 143 P. at 118.

A     court   may     therefore      enjoin     an    initiative    as   legally

insufficient only if it is defective in form, does not receive

the number of valid signatures required by the constitution, or

fails to follow the prescribed procedures.               Williams v. Parrack,

                                       - 8 -
83 Ariz. 227, 231, 319 P.2d 989, 991 (1957); see also Iman v.

Bolin, 98 Ariz. 358, 365, 404 P.2d 705, 709 (1965).

¶13           In Winkle, we reiterated these holdings and concluded

that only two kinds of procedural defects in form generally

warrant pre-election review under A.R.S. § 19-122(C).                  190 Ariz.

at 416, 949 P.2d at 505. 3       First, we will conduct a pre-election

review   to    determine   whether    an    initiative     complies    with   the

structural requirements of A.R.S. §§ 19-101 to -143 (2002 &

Supp. 2005), such as the publication or signature requirements.

See,   e.g.,    Kerby,   48   Ariz.   at    444-46,   62   P.2d   at    1135-36.

Second, we will review to determine whether an initiative in

fact constitutes legislation.              Saggio v. Connelly, 147 Ariz.

240, 241, 709 P.2d 874, 875 (1985).             In sum, we review before

3
     We have also reviewed initiatives before an election in two
other special situations not applicable here.     First, we have
conducted pre-election review to determine whether initiatives
violate the Separate Amendment Rule of Article 21, Section 1 of
the Arizona Constitution. See, e.g., Tilson, 153 Ariz. at 471,
737 P.2d at 1370.     The Separate Amendment Rule concerns only
constitutional amendments, not ordinary legislation, thereby
reducing    traditional    separation   of    powers    concerns.
Furthermore, Article 21, Section 1, sets forth the manner in
which proposed constitutional amendments “shall be submitted” to
the vote of the people, implying that pre-election review is
appropriate.

     Second, we have reviewed initiatives to determine if they
legislate zoning.   See Transamerica Title Ins. Co. v. City of
Tucson, 157 Ariz. 346, 348-49, 757 P.2d 1055, 1057-58 (1988);
City of Scottsdale v. Superior Court, 103 Ariz. 204, 207, 439
P.2d 290, 293 (1968).     These cases “represent a historical
anomaly specific to zoning and designed to protect the due
process rights of private property owners.”   Winkle, 190 Ariz.
at 417, 949 P.2d at 506.

                                      - 9 -
election      only       to    see    whether     an   initiative       “belongs    on   the

ballot . . . , not whether, if adopted, it will be valid or

constitutional.”              Winkle, 190 Ariz. at 417, 949 P.2d at 506.

¶14           Against this historical background, we must determine

whether a violation of the Revenue Source Rule is the type of

violation reviewable before election.

       2.     Revenue Source Rule Violations

¶15           The    League          does   not    allege       that    Proposition      207

violates the rules of form in A.R.S. §§ 19-101 to -143 that

traditionally have been subject to pre-election review or that,

if    passed,      the        initiative    will       not    constitute      legislation.

Instead, the League asks this Court to expand the categories of

pre-election        review       by    recognizing       violations      of   the   Revenue

Source Rule as a third type of defect that may be reviewed

before an election.             We decline to do so.

¶16           The defects in form that this Court will review before

an election are those that involve bringing an initiative to the

ballot because those defects “bear directly on the integrity of

the election process.”                 Winkle, 190 Ariz. at 416, 949 P.2d at

505.        When    an    initiative        has   been       properly   brought     to   the

ballot, we will not look into its substantive validity before

the people have approved it.                 Id. at 417, 949 P.2d at 506.

¶17           The Revenue Source Rule does not set forth a rule

regarding the form of ballot initiatives or the manner in which

                                            - 10 -
initiatives are brought to the ballot.                      See Kerby, 48 Ariz. at

444, 62 P.2d at 1135.                Unlike the technical requirements in

A.R.S.    §§    19-101    to     -143,    the    Revenue     Source      Rule        does    not

involve the circumstances under which the people are permitted

to vote.        Instead, it governs the substantive issue of ballot

initiative funding by protecting the state general fund from

unfunded ballot initiative mandates.

¶18            The League nonetheless argues that the Revenue Source

Rule regulates form and therefore is subject to challenge before

election       because    it     requires       an    initiative    to        include       some

information       regarding       the    initiative’s        funding          source.        We

disagree that providing information to voters is the focus of

the rule or that any information provided is merely a matter of

form.      The    Revenue       Source    Rule       was   not   intended           simply    to

provide    voters        with     information         no   matter       how     potentially

inaccurate or misleading, but rather was designed to ensure a

source of funding to protect the state’s general fund.                               As such,

it constitutes a matter of substance rather than form.

¶19            The County Supervisors Association, writing as amicus

curiae,    joins      the       League    in     suggesting      that         the     language

“measure       that   proposes,”        found    in    Article     9,    Section        23(A),

suggests pre-election review.               We are not persuaded.                   The phrase

describes the subject of the rule:                         proposed initiatives and

referenda.        The constitutional language does not manifest an

                                          - 11 -
intent        that     courts     conduct      pre-election         review      of    all

initiatives and referenda for compliance with the Revenue Source

Rule.        To the contrary, Article 9, Section 23(B) expressly sets

forth a post-enactment remedy:                 The legislature may reduce the

expenditure of state revenues to fund the initiative for the

fiscal       year     to   the   amount     produced    by    the     funding    source

identified in the initiative.                This language suggests that pre-

election review was not intended.

¶20            In light of the strong language this Court has used to

interpret       the    Separation     of    Powers    Clause,    we    must   exercise

restraint in reviewing initiatives before election in order to

respect the legislative process.                    In cases such as this, in

which    it     is    doubtful   that      pre-election      review    was    intended,

restraint is particularly appropriate.

        3.     Prudential Concerns

¶21            Restraint is also appropriate for several prudential

reasons.        First,      pre-election      review    requires      the    courts    to

issue what may in the end be advisory opinions.                         It therefore

may unnecessarily consume judicial resources.                    Winkle, 190 Ariz.

at 418, 949 P.2d at 507.                This occurs because we are asked to

opine on the validity or constitutionality of laws that may

never be approved by the voters.                Id. (noting that if the courts

offered       advisory     opinions     routinely      in    election    cases,      “the

judiciary       would      be    inundated     with     unnecessary         preelection

                                           - 12 -
challenges”).

¶22          Second,    pre-election     review     of     ballot    initiatives

necessarily    occurs    in    an    expedited   manner,     often    with    only

limited briefing by the parties and without a court of appeals

decision or a full record.            These concerns are exacerbated in

cases such as this, in which the constitutional provision at

issue has never been the subject of judicial interpretation.

¶23          Third, pre-election review in this case would require

us to remove an entire initiative from the ballot, even though

only one provision of Proposition 207 has been challenged as

potentially     violating      the    Revenue     Source     Rule.      If     the

legislature had passed a law similar to the Private Property

Rights   Protection     Act,   we    could     consider    severing    only   the

portion that violated the Revenue Source Rule.

¶24          Finally,   because      pre-election    review    may    chill    the

fundamental right of the people to legislate, it should be used

sparingly.    As we observed in Winkle:

      Grassroots democracy, exercised by initiative, is not
      always an efficient process; however, there are clear
      benefits to allowing the public to vote on an
      initiative, even though its validity may be questioned
      if it passes.   In a democracy, the process itself is
      often as valuable as the result.     A vote to enact
      legislation expresses more than a current whim of the
      people; it expresses the voters’ preferred rule of
      governance.

Id.   When the people set forth the circumstances under which

they will exercise their vote, and those circumstances are met,

                                      - 13 -
we    will   not     interfere      with    an     initiative     by     examining         its

substance before the measure passes.

B.      Substantive Review

¶25           Although we do not now resolve this issue, we vacate

the superior court’s determination that Proposition 207 violates

the Revenue Source Rule.                 The court should not have addressed

the issue because doing so required a pre-election substantive

review of the legislation, violating the Separation of Powers

Clause of the Arizona Constitution.

¶26           Moreover, on this limited record we cannot say whether

Proposition        207     violates      Article    9,   Section       23    because       the

initiative may not require “a mandatory expenditure of state

revenues,” the trigger for application of the Revenue Source

Rule.        If    Proposition      207     passes,      §   12-1134     will       have    no

financial         impact     on    the     state      general     fund           unless    the

legislature enacts a land use law that results in a regulatory

taking.      In the zoning arena, many if not most laws are passed

by cities and counties rather than by the state and thus would

affect local rather than state revenues.                         Any expenditure of

state general funds to pay just compensation thus depends on the

legislature’s actions.

¶27           We    need     not   resolve       these   questions          at    this     time

because “this court cannot undertake review of any substantive

legislation        before    an    actual    conflict        exists.”            Winkle,    190

                                          - 14 -
Ariz. at 417, 949 P.2d at 506.           If Proposition 207 is approved

by the voters and the legislature enacts a land use law that

results in a regulatory taking under § 12-1134, we can then – on

a full record and in the context of concrete facts – ascertain

whether there has been a violation of the Revenue Source Rule.

                              III.   CONCLUSION

¶28       The people have the right to approve or disapprove any

initiative that has been properly placed on the ballot.                   With

limited   exceptions    not    applicable     here,    the    judiciary    may

interfere in the initiative process only if an initiative does

not   comply   with    the    formal    requirements    for    bringing     an

initiative to the ballot.        The Revenue Source Rule does not set

forth any requirements for bringing a measure to the ballot, and

the League does not argue that Proposition 207 contains any of

the defects in form identified in             Winkle   as warranting pre-

election review.

¶29       We therefore affirm the superior court’s determination

that pre-election review of Proposition 207 is improper, but

vacate the superior court’s determination that Proposition 207

violates Article 9, Section 23 of the Arizona Constitution.

                                     __________________________________
                                     Rebecca White Berch,
                                     Vice Chief Justice

                                     - 15 -
CONCURRING:

___________________________________
Ruth V. McGregor, Chief Justice

____________________________________
Michael D. Ryan, Justice

____________________________________
Andrew D. Hurwitz, Justice

____________________________________
W. Scott Bales, Justice

                             - 16 -